“AI has great potential to improve warehouse efficiency and reduce costs”
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Yeming Gong, Professor of Management Science and Head of the Artificial Intelligence in Management Institute, Emlyon Business School, France
About the expertYeming Gong is a Professor of Management Science at Emlyon Business School. He is also the Head of the Artificial Intelligence in Management Institute (AIM) and the Director of the Business Intelligence Center (BIC). An award-winning researcher, Gong has published over one hundred scientific papers in leading academic journals. His research focuses on smart logistics, smart manufacturing, AI and management, and business intelligence. He was recently ranked the number one professor of management in France by P-Rank and named one of the top 10 warehousing and logistics specialists by the leading trade association MHI.
Mecalux sits down with Yeming Gong, a Professor of Management Science at Emlyon Business School (France), to analyse the potential of AI applications in the supply chain.
What technology trends are set to grow in warehousing?
The number-one trend that’s already revolutionising the warehouse industry and will keep expanding is robotics and automation technologies. Mobile fulfilment systems such as AMRs and AGVs, robotic storage solutions, automated intralogistics systems and robotic picking systems will be increasingly used in facilities around the world.
A second trend that’s set to grow is the Internet of Things (IoT) because of its effectiveness in improving warehouse operations and productivity. IoT sensors can be used to check inventory levels, monitor equipment and streamline the movement of goods within facilities. Companies will also increase the use of AI technologies to optimise warehouse operations by utilising data and gaining insights into vision-based inventory management, demand forecasting, storage allocation and shipping.
What other technologies will take off?
Another technology trend is virtual reality (VR) and augmented reality (AR) systems. Warehouse picking based on AR vision is already popular today. VR and AR technologies are being used to enhance order picking and sorting and can even help in in-house warehouse training programs to improve safety by simulating real-work scenarios.
Cloud computing will also gain attention in facilities thanks to its potential to scale up operations by leveraging real-time inventory tracking, automatic order fulfilment, and integration with supply chain systems. And finally, although today they’re still not central in logistics, I believe blockchain technologies are set to improve warehouse visibility and transparency.
Why do businesses need AI in their warehouses?
AI-powered systems can help businesses run their facilities more efficiently, accurately and safely, which can, in turn, enhance customer satisfaction. When we refer to AI in warehouses, people often think of it in terms of hardware — robots, equipment, even facilities — but AI-based software is just as important to improve operations. Hardware- and software-based AI systems can optimise repetitive and time-consuming tasks such as tracking, picking, packing, storage, sorting and shipping. This automation not only saves time, but also minimises errors and increases accuracy in all warehouse operations.
Today, AI is very much associated with software as a service: cloud-based AI services can help companies build greener facilities and contribute to social responsibility and environmental protection. AI can also help warehouse managers identify safety hazards, such as obstacles in the passing of equipment, and send alerts to workers to take suitable actions.
Another reason why businesses should embrace AI in their warehouses is the possibility to integrate operations throughout the supply chain: AI-powered systems can provide real-time insights into the status of the facility and optimise the whole supply chain to further reduce costs.
What are the most promising applications of AI to improve logistics processes in the warehouse?
AI has great potential to boost efficiency, reduce costs and minimise errors in warehouse operations, leading to better customer satisfaction and increased profit. I believe the number-one most promising application is autonomous mobile robots — AMRs, which can be used to optimise repetitive tasks such as material handling, palletising, internal goods transport and order picking. Another promising application is self-driving vehicles. I’m not referring to vehicles like Tesla, but self-driving forklifts. These handling equipment have proven particularly useful in logistics facilities and thus have seen an advancement in recent years.
The third promising application of AI is drones. For example, drone-based inventory management is already being implemented in warehouses, and some drones are even used in 3D-order picking — they fly through the facility to pick the required items. Even though today these are just experiments, they’ll probably become popular one day.
Cloud computing will gain traction in facilities thanks to its potential to improve operations
What other AI applications may grow in popularity?
A popular use of AI is chatbots, which have gained attention with the recent launch of ChatGPT. Using these smart chatbots to handle call centre tasks may grow in popularity, as customer service is crucial in logistics and warehousing. In the supply chain, interactive bots can also improve communication and processes that require the involvement of several divisions. For example, when managing a warehouse, you also need to integrate it with other departments — such as shipping — and chatbots can help you do that.
AI-based predictive maintenance is another promising application, which is especially important in today’s modern logistics facilities. Artificial intelligence can upgrade maintenance processes by analysing the sensors’ data and using machine learning algorithms. With AI-based predictions, managers can identify warehouse equipment failures before they occur and enable proactive maintenance to minimise downtime and reduce costs.
Incorporating AI technologies in the picking process is also taking off. AR-based picking is already being used in many countries around the world. We’re also seeing a rise in the use of cobots, collaborative robots that help operators raise picking efficiency while reducing pickers’ workloads.
What benefits can AI bring to the human workforce in a warehouse?
This is a very good question because when thinking about robots and AI, people often associate this technology only with productivity and efficiency. But that’s not the whole story. AI brings many benefits to the human workforce in a warehouse. It can contribute to improving workers’ well-being and safety. For example, robots can assist in repetitive tasks and allow workers to focus on high-level jobs and develop skills that are more valuable in today’s environment. AI technologies can further help managers shore up safety in facilities by identifying potential hazards and adopting proactive measures to protect operators.
With AI equipment in the warehouse, companies can reduce the risk of physical strains caused by laborious tasks such as picking, sorting and packing. AI-driven systems like cobots can collaborate with human operators to avoid injuries, reduce the mental fatigue associated with repetitive tasks and improve workers’ overall well-being. AI can also augment human intelligence by providing real-time data and insights that can assist workers in making better decisions.
How can robotised systems help boost picking?
This is probably the most important trend we’ve seen in the last 10 years. Warehouse robots can work much faster than humans and pick and place with greater accuracy, which leads to a significant increase in speed and efficiency. Robotic systems also help reduce errors and safety risks in the picking process. This is particularly important in large manufacturing or industrial facilities, where workers need to handle heavy loads and equipment.
Robots offer full-time picking capacity. They can work 24 hours, 7 days a week. In the past, this was infeasible because it is associated with and limited by labour laws. However, robots can perform tasks around the clock and work overtime non-stop. This capacity is very important for retailers, who need to do order picking on weekends, and for chemical factories, where the manufacturing process cannot stop.
How can warehouse simulation help anticipate needs?
While simulation is a very powerful tool, digital twin technology is also gaining popularity. Many companies are building a digital twin of their logistics facilities to simulate different scenarios, test various structures and perform capacity planning. In the past, it was difficult to do rigorous planning, but now, with simulation tools and digital twins, managers can anticipate capacity needs and change robot requirements, staff levels and warehouse equipment in advance.
Simulation can also contribute to process improvement. In today’s facilities, operations can be very complex, and it’s crucial to find ways to scale up processes like picking, sorting and storage. With digital twins, companies can identify bottleneck tasks and check which processes have deficiencies to make operational improvements.
Simulation can also be used for risk management. Today’s AI systems can do accurate forecasting and help warehouse managers anticipate and plan for potential disruptions. For example, if one of your robots has a problem, your equipment breaks, or you have a labour shortage, with today’s digital twins, you can perform simulations to handle these unexpected events effectively. Risk management is a relatively new function for today’s simulation that holds great promise.
What’s the potential of AI chatbots in logistics?
AI-based chatbots can streamline logistics processes, reduce costs and enhance customer experiences. In the logistics industry, interactive bots can provide a faster response to customers’ questions, such as tracking information and delivery updates. If you ship goods from Paris to Shanghai or New York, today, with chatbots, you can already confirm where your parcel is.
The second potential of chatbots lies in order processing, a crucial step in the warehouse. The new generation of AI chatbots holds promise to automate processing tasks such as verifying order details and generating shipping labels. Automating these tasks with chatbots can reduce many errors and speed up processing time. AI bots can be integrated into the accounting and finance department and warehouse operations to achieve faster delivery times and increase customer satisfaction.
Today’s AI chatbots can also be used in warehouse management, tracking, order fulfilment and equipment maintenance. They can even provide real-time updating of inventory levels and improve accuracy. Overall, AI chatbots hold great potential to streamline communications across the supply chain and enhance customer service and supplier relationships.
Supply chains will experience a fundamental change with the next generation of AI technologies
What’s your opinion on the potential of ChatGPT to reshape the supply chain?
ChatGPT is a small step towards artificial general intelligence (AGI) — both have a big potential for society and economics. The influence of ChatGPT on today’s supply chain is still limited, but I believe it could reshape warehousing and logistics significantly. For example, it can do a customer service job much better — and full time, 24/7. It can also provide valuable insights into customer preferences and identify demand patterns. This advanced chatbot could also be used throughout the whole supply chain to automate tasks such as order processing and logistics planning. ChatGPT is a very useful technology, but its influence on the supply chain is yet to be seen.
How do you envision the future of supply chains with the next generation of AI?
The development of AI is far from finished — we’re only at the very beginning of general AI. Supply chains will experience a fundamental change with the next generation of AI technologies. In the future, as AI systems increase their intelligence, most repetitive and intensive tasks in the supply chain will probably be performed by robots. This will, in turn, reduce costs, increase efficiency and free up human workers to focus on more interesting jobs. In the future, we’ll also see changes in the structure of the supply chain. We may see an AI-based physical internet become a reality. The overall structure of logistics will be fundamentally changed.
The next generation of AI will also bring sophisticated driverless lorries and warehouse robotics. Moreover, in the years to come, the whole supply chain will be fully automated. General AI will help enhance customer service. Building a customer-centric value chain with AI-enabled chatbots will reduce response time, improve operations visibility and boost customer satisfaction. Finally, I believe the supply chains of the future will integrate blockchain technologies and AI to build a new version of the supply chain financial system.
I think tomorrow’s supply chains — even in the near future — will be fundamentally different from today’s. We’re at the dawn of a new technological era for logistics.